Beyond compliance: taking diversity and inclusion to a new level – Interview with Stephen Frost

Diversity and Inclusion is a topic that we are deeply passionate about at Saxton Bampfylde, recognising its importance in shaping the very best leadership teams for our clients. The term ‘diversity’ is so commonplace in our everyday language that it can sometimes be easy to skip over its true meaning. So often, organisations develop programmes designed to focus on increasing their diversity without an understanding of the role that inclusion has to play in achieving their goals.

In April 2019, Saxton Bampfylde held the 5th event in its HR Leadership Breakfast series and we were delighted to be joined by Stephen Frost as our guest speaker, who shared insights from his latest book ‘How to Build an Inclusive Organization’. We caught up with Stephen to hear how organisations can harness inclusivity to ensure they are reaping the full value from a diverse workforce, and the important role HR leaders have to support and champion this.

Stephen Frost

What does diversity and inclusion mean to you, and why is it important in today’s work place?

Diversity is just difference. It’s a fact, and it’s all around us whether that is demographically, politically, cognitively. Inclusion is bringing that together to become more than the sum of the parts, to add value and to bring out the benefits for that organisation.

Our world is increasingly diverse but naturally, as human beings, we tend to prefer sameness to difference. If we don’t consciously think about, and lead on, diversity and inclusion, we won’t benefit from it. We need to be conscious about what diversity is and then conscious about how we can include to get the value from it.

In terms of our work at Frost Included, we support organisations to do this in five ways: supporting them to embed it in their overall strategy; supplying tools to extract, model and use data around levels of inclusion; looking at governance and decision-making; training on inclusive leadership; and finally de-biasing systems such as recruitment processes.

A lot of people just focus on diversity, which is fine, but if you don’t also pay attention to inclusion then you are unable to reap the benefits of that diversity.

In what ways have you observed a change or development in conversation about diversity and inclusion?

I think there definitely has been a change. There are three main approaches that we see in terms of diversity and inclusion. The first of these I call ‘Diversity 101’, which is basically a compliance-led paradigm. We’ve seen people doing this since the 80s and 90s because it’s the law. We’ve had the important milestones of the Gender Pay Act, the Equal Pay Act, race legislation, the Equality Act, but relying on this alone is never really going to add value.

The second paradigm is marketing-led, what I call ‘Diversity 2.0’. This is doing it because it looks good; it’s reputational. If you look at any FTSE 100 company report, the diversity word will be in there a lot because it has to be. And that’s fine, marketing is really important, but it’s insufficient. Often, we know that those representations of aspired reality are not actually true reality.

These two paradigms are where most companies are currently: they’re doing it either because they have to or because it looks good. It’s only a minority of organisations that are doing it for the third reason, which is the space in which we mostly work. This is because fundamentally diversity and inclusion contribute to better decision-making. It’s a leadership issue, not just a question of compliance or marketing but rather looks at how you consider your customers, how you recruit or manage people or procure goods and services. If it’s not embedded into the decisions you make, then it’s not really adding value and becomes a forever separated or segregated workstream.

The change we’re seeing is positive in that people are generally starting to move gradually closer to the third paradigm. We’re seeing now a lot more conversation and engagement in that third area. Companies are taking it much more seriously beyond a compliance issue and instead thinking about how it features in their decision-making.

What steps should organisations be taking to ensure that diversity doesn’t merely become a ‘check box’ exercise?

I suppose certain things have to be ‘check boxes’, but if you want to really get the value from something like diversity you have to engage in it, which is a leadership issue. If you think about your closest friends or colleagues, they tend to be people like you. They tend to look like you, think like you, and therefore reinforce your world view. That’s fine in your personal life because I think we all want to have friends and be loved and feel comfortable and relaxed. In professional life, however, we need to be challenged. We need to have lots of people with different perspectives so that we make better decisions and we don’t have blind spots.

We do absolutely need to focus on active inclusion therefore, and I suppose that’s where the ‘check box’ comes in. You can absolutely check the box of diversity in a way that looks good and makes you feel like you’re doing the right thing, without you ever really getting any value from it.

Positive discrimination, that is to say prefacing one group or one person over another for non-meritocratic reasons, tends at the moment to benefit the people in power. Typically, we hold people different to us to a higher bar compared to people you intuitively think you understand. One of the reasons I run Frost Included is to challenge that market failure and to have greater competition, greater meritocracy, greater transparency in recruitment.

How has the publicity around issues like the #metoo movement and the gender pay gap impacted the agenda?

I think this has happened in a couple of ways. Firstly, diversity has definitely moved up the agenda massively. If we were having this conversation five or ten years ago, it would have felt like a niche topic. Now it’s on the board agenda for virtually every meeting. It’s definitely shot up, and that’s largely because of the profile it is now given.

The second thing I’d say is that the response to that profile has often not been very efficient. For example we still see the 80:20 rule here, where 80 per cent of the effort companies are making is not really having an effect and they’re spending a lot of time on marketing and compliance issues. We did some research on the gender pay gap last April where we correlated all the organisations listed by the Times as being in the Top 50 for gender equality against their actual gender pay gap data, and actually found an inverse correlation. Many of those ranked top in the listings had published data that directly contradicted this. We saw this interesting phenomenon where organisations were spending lots of time and money on awards and initiatives that didn’t really have a tangible effect.

It comes back to that third paradigm – we need to get diversity and inclusion embedded into strategic decision-making.

You highlighted the importance of measuring inclusion; could you talk about how you do this with organisations?

I tend to think about measurement in three areas, the first of which is diversity. Lots of organisations measure, for example, gender. I would suggest that the scope is far more than gender – that you measure things like social mobility or cognitive diversity.

The second thing is then modelling that: what does the organisation look like in five years’ time? If you do nothing, or if the current recruitment and promotion trends continue as they are, what you might find is that most organisations become less diverse over time as a consequence of homophily: we naturally tend to hire and promote in our own image. If we do nothing and treat everyone the same, or say things like “I don’t see colour”, we naturally become less diverse over time.

The third, and most important thing, is measuring inclusion. The value of this is that you can have a very diverse company that’s actually not very inclusive and isn’t levying the value of that diversity: people aren’t consulted or included, or that they’re not very happy. Measuring inclusion gives you a much more meaningful measure of how attractive that company is both to people wanting to join, and in terms of people staying and growing.

To do this, you ask diagnostic questions like “how able are you to dissent from your boss?”, “how often are you interrupted in a meeting?”. Through this, you’re able to get a measure of an individual’s perceptions of fairness and psychological safety, which is far more important than a regular survey which tends to be quite passive. Getting a tangible measure of inclusion gives you a chance to isolate those behaviours which either increase or detract from inclusion and allow you to actually do something about it.

It can be as simple as if people feel they’re interrupted in meetings regularly, just saying “I’ll interrupt less” or “I’ll rotate the chair of the meetings or appoint a devil’s advocate”. This allows those quiet, brilliant introverts to contribute. For example, 80 per cent of women report being interrupted in meetings, but only 20 per cent of men notice. So, to put it very simply, if men did one thing it would be to talk less and listen more in meetings, resulting in far superior outcomes simply because you’re drawing from all the talent in the room.

Culture is, at the end of the day, what you do. If you focus on things that do have an effect rather than just the awards and the events and the noise, you’d have a far greater impact on the running of the organisation.

What role do HR leaders have in supporting and championing this topic?

I think that HR has a choice to make here. Some HR departments are brilliant: they recognise that this is a strategic issue, the time for which has come, and they use is as a talking point within the business. It becomes a strategic conversation which goes beyond the process functions of HR to actually add value, challenge and overall make the organisation better.

There are unfortunately still some HR departments that see it as an extra workload, largely because they don’t get it. They therefore make very poor champions for diversity and inclusion. They might give it to a junior person to manage, thereby giving the most significant change work to the people with least power. And they wonder why nothing ever happens!

HR has a choice: it can either embrace a true understanding of this, third paradigm-style, and really go for it, or it can stay stuck in the first two paradigms and forever look on it as a burden.

I think those who do it best, do it in a very thoughtful way and thoroughly embed it. They do things like reviewing job descriptions to remove terms like ‘hard-hitting’ or ‘aggressive’. Or they might invest in a tech programme that allows for blind recruitment. You’ve really got to own it: it’s got to be part of the day job, not a separate workstream to think about.

What practical advice and tips do you have for leaders and their teams who are seeking to change their approach to diversity and inclusion?

There’s a load of stuff! I think firstly it’s about understanding. Understand that this is really about inclusion more than just diversity. If you’re giving talks about diversity and inclusion simply because it’s the ‘right’ thing to do or because you’ve got to comply with the law, it’s not very compelling. You have to understand why you’re investing in this and get your personal ‘why’ down.

The second thing is to lead. It’s not someone else’s job to do this: it’s your job to embed it in your thinking. How does it manifest itself in your management or leadership style?

Thirdly, deliver. What are the practical things you can do? Rather than putting it off because you haven’t got budget or the scope this year, think about what you can do now: who you sponsor, who you mentor, how you allocate time to direct reports. Come up with two or three practical things that you can action right now.

Which organisations are stand out in sustaining and leveraging the power of a diverse workforce?

The Bank of England is really invested in measuring inclusion and has gained some fantastic insights on diversity in recent years linked to its overall mission of risk mitigation. What the Wellcome Trust is doing is also really important. They’re really embracing diversity and inclusion internally, in their funding decisions, in their overall measurement. They’ve reviewed survey data two years running now and you can measure the increased inclusion associated with higher performance and higher psychological safety. Aspects of what Google does are also fantastic: having consistent questions for all candidates, for example, and having the hiring manager removed from the final interview.

There are lots of organisations that are doing it well, but I’d caution against saying that any one organisation has fully leveraged a diverse workforce. I don’t believe that any organisation will ever be able to fully do it because the goalposts are constantly shifting. But that shouldn’t deflect us from the fact that there are aspects that organisations are doing brilliantly, and if we could collect all those together and put them into one organisation that would be amazing!

This interview followed Saxton Bampfylde’s HR Leadership Breakfast in April 2019.

Our HR Leadership Series events bring together HR leaders from a range of commercial businesses for the opportunity to discuss and share best practice, and to hear from top industry experts on a range of topics that impact workforces today.